Fleet Downtime Recovery

Captive insurance is an alternative to traditional insurance where you own or share ownership of the insurance company that covers your risks.

Unlike traditional insurance where you pay premium to external insurance companies with limited control, captive insurance offers greater control over insurance operations, claims handling, and costs.

The key benefits of captive insurance include the ability to customize coverage, retain underwriting profit, and directly benefit from your strong safety record.

Discover how captive insurance can help your fleet cut costs while maintaining comprehensive insurance coverage.

Captive insurance can help fleets reduce insurance costs in several ways.

First, you eliminate the profit margins that traditional insurance companies build into premium calculations.

Second, well-managed fleets with strong safety records benefit directly from their performance instead of subsidizing poor risks in traditional pools.

Third, captive insurance offers the ability to retain underwriting profit that would otherwise go to external insurers.

Over time, captive insurance helps operations achieve cost savings over time, especially for fleets with strong safety and risk management programs.

The benefits of captive insurance for fleets include:

• Cost control - Direct influence over insurance costs through safety programs and claims management, allowing fleets to manage costs more effectively than with traditional insurance
• Customization - Ability to tailor and customize coverage to your specific needs, unlike traditional insurance with one-size-fits-all policies
• Transparency - Full visibility into insurance premiums, claims, and all cost components
• Profit retention - Underwriting profit stays with your operation instead of enriching external insurance companies
• Greater control - Direct involvement in claims handling, safety initiatives, and risk mitigation strategies
• Predictable costs - Less subject to insurance market volatility, providing stability in managing insurance expenses

Captive insurance for fleets works best when you have:

• Strong safety culture - Your fleet safety programs and driver training produce favorable loss histories
• Adequate fleet size - Typically 25+ vehicles to achieve meaningful risk pooling, though some group captive options accept smaller fleets
• Financial stability - Ability to fund retention levels and capital requirements
• Long-term perspective - Willingness to invest in cost control and safety improvements over multiple years
• Management commitment - Dedication to continuous improvement in fleet safety and claims management

It is important to seek expert advice. A guide to captive insurance evaluation can help you determine if this insurance solution is right for your operation. We can help you assess whether your current performance justifies exploring captive insurance as an alternative to traditional insurance.

A group captive is a shared captive insurance structure where multiple companies join a captive together, pooling their risks and sharing the benefits of captive insurance. When you join a group captive, you:

• Share ownership with other captive members
• Benefit from larger risk pooling than you could achieve alone
• Have lower capital requirements than forming a captive alone
• Gain immediate access to captive insurance benefits

Forming a captive insurance company on your own (single-parent captive) requires:

• Larger fleet size (typically 50+ vehicles)
• Higher capital investment ($500K+ in annual premium)
• Your own management infrastructure
• Greater control but more responsibility

Most mid-sized fleet operations find that joining a group captive offers the right balance of benefits and investment. Insurance by industry group captives allow you to join with similar operations facing comparable risks.

This is critical: captive insurance doesn't eliminate your right to recover from at-fault parties. When another driver damages your vehicles:

• Your captive pays first - To keep your fleet operations running, your captive insurance program handles initial repairs
• We pursue the at-fault party - We recover all costs from the negligent party's liability coverage
• Your captive is reimbursed - Recovered funds return to your captive insurance company, protecting its financial health
• Your loss histories stay clean - The claim is offset or eliminated, preserving the favorable record that justifies lower insurance costs

This is one of the often-overlooked benefits of captive insurance: you have direct financial interest in aggressive recovery, unlike traditional insurance where carriers keep recovered funds. Our services help you maximize this advantage, allowing fleets to protect the cost savings they've earned.

Captive insurance for fleets can include multiple coverage types, including, but not limited to:

• Commercial auto insurance - Liability and physical damage for fleet vehicles (also called auto liability)
• General liability - Premises and operations liability for your business
• Workers' compensation - Employee injury coverage in many jurisdictions
• Cargo insurance - For trucking and delivery operations
• Commercial insurance endorsements - Customized coverage for unique exposures

The ability to customize coverage is a major advantage of captive insurance. Unlike traditional insurance with rigid policy structures, captives offer flexibility to tailor insurance policies to your specific needs. This is especially valuable for fleets with unique operations or risks that don't fit standard commercial insurance programs.

To join a captive or enter a captive insurance arrangement:

1. Evaluation - Assess whether your fleet qualifies based on size, safety record, and financial stability. Interview captives or review a guide to captive insurance to understand requirements.
2. Application - Submit an insurance submission packet including loss histories, current insurance policies, fleet details, and safety programs documentation.
3. Underwriting - The captive insurers or group captive managers evaluate your risk profile and quote terms.
4. Approval - If accepted, you'll receive proposed insurance premiums and capital contribution requirements.
5. Implementation - Work with the captive insurance program to transition from traditional insurance, typically at your renewal date.
6. Ongoing management - Participate in managing insurance through safety committees, claims review, and continuous improvement.

We can help you prepare to join a group captive by cleaning up outstanding third-party claims, improving your loss histories, and demonstrating the strong safety and risk management that captive members need.

Safety and risk management are fundamental to captive insurance success. Unlike traditional insurance where your safety efforts have limited impact on costs, captive insurance directly rewards your investment in fleet safety:

• Direct cost impact - Fewer accidents mean lower claims, which directly reduce your insurance costs
• Underwriting profit - Strong safety programs allow your captive to generate underwriting profit instead of paying claims
• Premium stability - Consistent safety performance leads to predictable insurance premiums year over year
• Competitive advantage - Your safety culture becomes a financial asset, not just a compliance requirement

Captive insurance offers strong incentives to improve safety because you benefit directly from every accident prevented. This alignment of safety and financial goals is a key advantage over traditional insurance where carriers capture most of the benefit from your safety investments.

The insurance market experiences cycles of "hard" markets (rising rates) and "soft" markets (falling rates). Traditional insurance exposes you fully to this volatility—your insurance premiums can spike in hard markets regardless of your performance.
Captive insurance helps manage insurance costs despite market fluctuations because:

• Performance-based pricing - Your insurance costs are primarily driven by your actual claims, not market conditions
• Insulated from market - You're less affected by the insurer's need to raise rates due to poor results in other lines of business
• Reinsurance stability - Even when captives purchase reinsurance, they negotiate multi-year terms that provide stability
• Capital cushion - Retained underwriting profit from good years helps buffer costs in challenging years

This is especially valuable for well-managed fleets that invest in safety—captive insurance ensures you benefit from your efforts regardless of what's happening in the broader insurance market.

Absolutely, and it's even more important in captive insurance than traditional insurance.

Here's why:

• Direct financial benefit – When we recover funds from at-fault parties, your captive insurance company receives the reimbursement, directly improving its financial position.
• Loss history protection – Recovered claims don't impact your loss histories, preserving the favorable record that justifies lower insurance costs.
• Underwriting profit enhancement – Reducing net claims through recovery increases underwriting profit that benefits you.
• Member protection – In a group captive, aggressive recovery protects all captive members by preserving the shared pool.

Unlike traditional insurance where carriers keep recovered funds and you see little direct benefit, captive insurance returns the full value of recovery to you. This makes third-party recovery services significantly more valuable for captive members than for traditionally insured operations.

Capital requirements vary based on structure:

Group captive membership:

• Initial capital contribution: typically $25K–$100K depending on your fleet size
• Annual premium: typically similar to traditional insurance initially, declining as underwriting profit accumulates
• Retained funds: capital contributions are returned when you exit, plus accumulated profit

Forming a captive insurance company:

• Minimum capital: often $250K–$500K depending on domicile and coverage types (varies)
• Operating costs: often $100K–$200K annually for management, accounting, and compliance (varies)
• Annual premium: what you'd pay to fund your self-insurance retention

While capital requirements are higher than traditional insurance, captive insurance offers the advantage of building equity. Your capital contributions and underwriting profit remain available to you, unlike traditional insurance where premium is simply an expense.

Captive insurance doesn't necessarily eliminate your relationship with commercial insurance companies. Many captives use "fronting" arrangements where:

• A commercial insurer issues the policy – Providing the insurance coverage certificates you need for compliance.
• Your captive reinsures the risk – Taking on the actual financial exposure.
• The fronting carrier receives a fee – Typically a small percentage of premium for administrative services.

This hybrid approach gives you the control and cost benefits of captive insurance while maintaining access to admitted insurance policies required by some states or customers. It’s a practical insurance solution that combines the best aspects of both approaches.

This is an important consideration. Captive insurance requires you to accept more volatility than traditional insurance:

• Short-term impact – A bad claims year will reduce or eliminate underwriting profit for that year.
• Capital cushion – Accumulated profit from previous good years helps absorb bad years.
• Reinsurance protection – Most captives purchase reinsurance for catastrophic losses.
• Long-term perspective – Over 5–10 years, cost savings from good years typically outweigh occasional bad years, depending on the situation.
• Risk mitigation – Investment in safety and risk management reduces the likelihood of bad years.

The key is that captive insurance rewards well-managed fleets over time. If you have strong fleet safety and claims management, the occasional bad year is more than offset by the benefits of captive insurance in typical years. This is why captives work best for operations with proven safety records and a commitment to continuous improvement.

Transitioning to captive insurance typically follows this timeline:

6–12 months before renewal:

• Evaluate whether captive insurance is right for your operation
• Clean up loss histories and improve safety documentation
• Research group captive options or feasibility of forming a captive
• Prepare insurance submission packet with detailed information

3–6 months before renewal:

• Submit applications to join a group captive or begin forming your own
• Undergo underwriting review by captive insurers
• Receive quotes and terms for captive insurance membership
• Compare costs and benefits vs. traditional insurance renewal

At renewal:

• Execute captive insurance program agreements
• Transition policies from traditional insurance to captive
• Establish claims handling and safety reporting procedures
• Begin participating in captive management and committees

First year:

• Focus on safety and claims management to demonstrate performance
• Participate actively in managing insurance operations
• Document all third-party recovery opportunities
• Build track record that justifies continued cost savings

We can support this transition by aggressively pursuing outstanding third-party claims and improving your loss histories before you enter a captive insurance program.

Captive insurance can offer tax advantages, though you should consult with tax advisors about your specific situation as we are not tax attorneys:

• Premium deductibility – Premium paid to your captive insurance company may be tax-deductible as a business expense.
• Investment income – Your captive can invest reserves and capital, with potential tax advantages depending on domicile.
• Underwriting profit – Profit retained in your captive may receive favorable tax treatment.
• Risk distribution – Properly structured captives can achieve insurance tax treatment, allowing current deductions for future claims.

However, tax benefits should be secondary to the core insurance and risk management benefits. The IRS scrutinizes captive insurance arrangements, so proper structure and legitimate insurance purpose are essential. Focus first on whether captive insurance makes sense for managing insurance costs and risk, then optimize tax treatment with qualified advisors.

Captive insurance for trucking companies works particularly well because:

• Industry-specific risks – Industry captives often understand trucking exposures better than general commercial insurance.
• Safety culture – Trucking operations with strong safety programs benefit directly from their investment.
• High insurance costs – Trucking faces expensive commercial auto insurance, making cost savings from captive insurance especially meaningful.
• Regulatory compliance – Captives can be structured to meet DOT and FMCSA insurance requirements.
• Cargo and liability – Trucking-specific captives can include commercial auto insurance, cargo coverage, and general liability in one program.

Many trucking companies have successfully used captive insurance to cut costs while maintaining comprehensive coverage. Group captive options specifically for trucking allow even mid-sized carriers to access these benefits without forming their own captive insurance company.

When you join a captive insurance program, you take on more responsibility than with traditional insurance:

• Active participation – Attending captive member meetings, serving on committees, and contributing to group decisions.
• Safety reporting – Providing detailed information about your safety programs, claims, and loss control efforts.
• Claims management – Working closely with claims administrators to manage and resolve claims efficiently.
• Financial monitoring – Reviewing captive financial statements and understanding your share of results.
• Continuous improvement – Implementing safety and risk management improvements based on captive data and recommendations.
• Compliance – Meeting all regulatory and operational requirements of the captive insurance program.

This greater involvement is part of having control of your insurance. Unlike traditional insurance where you're passive, captive insurance requires active participation in managing insurance operations. For fleet operations committed to safety and cost control, this involvement is an advantage, you directly influence outcomes instead of relying on external insurance companies.

Absolutely. Your internal structure doesn’t limit your rights to pursue negligent parties. Whether you’re self-insured, in a pooled arrangement, or have traditional coverage, you have full rights to pursue at-fault parties for:

• All repair costs you paid
• Loss of use while vehicles were down
• Diminished value after repairs
• Administrative and handling costs

Every dollar recovered reduces the net claim against your books, protecting loss histories and future rates.

When we recover funds from at-fault parties, the claim can be:

• Fully offset – If recovery equals or exceeds costs, showing zero net loss.
• Partially offset – Reducing the net loss to a smaller amount.
• Reclassified – Some systems track recovered claims separately from unrecovered ones.

The result is a more favorable claims experience that supports better terms at renewal.

Yes. Even if you’ve already paid for repairs to keep vehicles operational, we can pursue reimbursement from at-fault parties, as long as the claim is within the statute of limitations.

We document all costs you incurred and pursue full recovery, protecting your loss histories retroactively.

Most straightforward cases resolve within months. Complex cases involving disputed liability, multiple parties, or significant damages may take months or years.

We work to expedite recovery while ensuring you receive full compensation.

When at-fault parties have insufficient liability limits, we explore:

• Your own underinsured motorist coverage (if applicable)
• Additional liable parties who may share responsibility
• The at-fault party’s personal assets in cases of severe negligence
• Other policies that might apply

We pursue all available sources to maximize your recovery.

We document downtime through:

• Dispatch records showing missed trips or deliveries
• Customer contracts showing lost revenue opportunities
• Driver payroll showing idle time
• Historical utilization data for the specific vehicle
• Rental costs if you secured temporary replacements
• Industry standards for similar vehicle types

We build comprehensive documentation that carriers can’t easily dispute.

We pursue at-fault parties’ liability carriers, typically not your own coverage providers. Our professional approach maintains positive relationships while protecting your interests.

In fact, your own carriers often appreciate our thorough work because it improves overall loss ratios.

We can help prepare your operation for this transition by:

• Cleaning up outstanding third-party claims to improve loss histories
• Establishing recovery processes you’ll need going forward
• Training your team on documentation and evidence collection
• Demonstrating the financial discipline that makes alternatives viable